DraftKings, a leading name in the US sportsbook industry, has reported a remarkable 17% increase in revenue year-over-year for Q1 2026, reaching $1.646 billion. The company also saw an astonishing 599% rise in adjusted EBITDA, climbing from $24 million in Q1 2025 to an impressive $167.9 million.
Despite this growth, the adjusted EPS of $0.20 fell slightly below the expected $0.22, although it still marks a significant improvement compared to the previous year. The shift towards new prediction markets has notably contributed to a net revenue margin increase of 7.8% for the quarter.
These results signify a pivotal moment for DraftKings as it transitions from a high-growth cash-consuming entity to a consistently profitable leader in the iGaming and sportsbook arena.
CEO and co-founder Jason Robins remarked on the positive results during a conference call, stating, “We are off to a fantastic start to the year as our first quarter results exceeded our expectations. Our core business is robust, and we are witnessing a shift towards profitability.” He added that this momentum provides the company with the necessary resources to capitalize on its advantages in the prediction market. With the integration of their Super App, market-making capabilities, and proprietary exchange, DraftKings aims to secure a leading position in sports predictions by the end of the year.
Analysts have noted that the sportsbook's net revenue margin has improved to 7.8%, up from 6.4% year-over-year, largely driven by an increase in profitable parlay bets, which tend to offer higher returns for the house. Management is keen to emphasize the DraftKings Predictions narrative, viewing it as a strategic advantage.
Robins reiterated that the strong profitability in Q1 empowers the company to further leverage its position in predictions. This new growth vertical could potentially draw millions of customers beyond the traditional sports betting demographic.
On a different note, the number of monthly unique payers (MUPs) decreased by 4% to 4.2 million, primarily due to DraftKings' exit from the Texas Lottery market in 2025. However, excluding this exit, MUPs actually increased by 2%. More encouragingly, the average revenue per MUP (ARPMUP) surged by 21% to $131, indicating that DraftKings is effectively maximizing value from its existing user base.
Despite the impressive revenue and EBITDA results, shareholders expressed some disappointment as DraftKings maintained its FY 2026 revenue guidance of $6.5 to $6.9 billion and EBITDA guidance of $700 to $900 million, as the market had anticipated a more optimistic outlook.
CFO Alan Ellingson expressed confidence in the company’s future, stating, “The business continues to scale efficiently as we grow revenue, expand profitability, and invest in high-return opportunities. We are observing predictable and improving cohort economics, reinforcing our belief that we have established a powerful long-term business model.”